How on earth is competitive Magic thriving?

Got this link from Slashdot to a New York Times article about professional gamers losing their sponsorships and entering the real world, with pro gaming circuits like Championship Gaming Series and Cyberathlete Professional League folding due to the economy sucking. Apparently Major League Gaming is turning a profit, though.

But I've always wondered about these leagues' business models. How can you spend $1-2 million total on your elite players, dish out prize cash, and put on extravagant tournaments that probably cost more than Pro Tours (I've never been to a PT, but these MLG tournaments have a lot more lights, seating, equipment, and booth babes) all off of sponsorship money? At least with Magic it makes sense: when people take the game more seriously, they buy more Magic cards and play in more FNMs, PTQs, and MODO drafts.

It's a little confusing, with such bad times financially, that we are breaking attendance records in North America for Grand Prixs and PTQs, and that tournament organizers can turn profits on $5k tournaments and cruises. Guess it just goes to show what a great product Magic is. I know I certainly don't get positive EV from playing Magic, and I don't know too many people in Seattle that do, but we're still flying to Grand Prixs and even PTQs. I guess you can't do that with Halo unless you pay some people to show up and beat up amateurs, since you get nearly the exact same experience sitting your living room on X-Box Live.

Maybe it's also a little justice in the world. Competitive gamers don't exactly contribute much to society, so they shouldn't make more money in the long run than, say, teachers or policemen.